India-based music streaming company Gaana is dropping its free tier and moving to a paid subscription-only model.
According to Reuters, the move comes after the Spotify rival failed to raise new investment or attract a buyer.
The article notes that the app, which has more than 100 million users, wasn’t allowing free streaming as of Friday (September 9).
Reuters reports that it has seen an email sent by Gaana to ‘music partners’ stating that a potential acquisition deal had “fallen through”.
While, the other party wasn’t named in the email, citing sources, Reuters reports that the acquisition talks were with India-based telecommunications firm Bharti Airtel.
Airtel was reported last month to be in ‘serious talks’ to buy Gaana. Airtel and Gaana had reportedly been negotating a potential deal for several weeks, according to reports published in July.
According to Reuters‘ report, Sachin Kamble, Gaana’s Head of Content and Partnerships, announced the service’s move to a paid subscription focus in the email, noting further that Gaana had failed to “bring in fresh investments”.
Said Kamble in the email: “Now we are at (a) crossroads – wind down/find a way to continue … we have decided to give this another try. Hence, we have closed streaming for free users today and (are) moving to paid only model”.
The email continued: “We will need your support on this, else we will have to shut down completely.”
Gaana CEO Sandeep Lodha told Reuters over text message that “We are not shutting down”.
Gaana — majority-owned by Times Internet – raised 2.49 billion rupees from Chinese tech and media giant Tencent Holdings last year by issuing convertible shares.
That deal valued Gaana at around $570 million to $580 million at the time, according to Entrackr.
Citing one of its sources, Reuters said that Gaana also struggled to raise money from investors, including Tencent.
“Gaana is a strong business that is increasing its focus on subscription business with an intent to be a lasting company for years to come.”
Spokesperson, Gaana (SPEAKING TO Reuters)
A Gaana spokesperson told Reuters in a statement that the contents of the email sent to Gaana’s music partners “are being read out of context”. and that the email was sent “in the course of private negotiations”.
The Gaana spokesperson added: “Gaana is a strong business that is increasing its focus on subscription business with an intent to be a lasting company for years to come.”Music Business Worldwide
